Brexit Uncertainty - Affects on Logistics Companies

‘Brexit’ is the buzz word of every news station right now. It’s a massive source of uncertainty to our economy and there is no industry that is sure of the future.

One industry that is more uncertain than most is the logistics sector. Will Brexit change the way we ship parcels? Will it affect the cost or movement of freight? What impact will it have on companies and end users?

With a no-deal Brexit looming, this article looks at what is being said on these matters thus far and what the likely outcomes may mean for the logistics industry.

Deal or No Deal

Should we come out with a no-deal Brexit, there are plans in place to avoid charging a customs duty on 87% of tradeable goods. This plan will be set in place for the next year to make sure we secure the best deals possible moving forward.

Tariffs will still apply to 13% of goods to ensure fair and safe practices, but it seems that the strategy will be to ensure the cost of importing, exporting and shipping in general does not rise in the near future and may even be reduced in the short-term.

Future Tariffs

The following are areas where tariffs will still apply:

  • A mixture of tariffs and quotas on beef, lamb, pork, poultry and some dairy to support farmers and producers.
  • Tariffs on finished vehicles. However, car manufacturers relying on EU supply chains shouldn’t face additional tariffs on car parts imported from the EU to prevent disruption to supply chains.
  • Tariffs to provide support for UK producers against unfair global trading practices, such as dumping and state subsidies. Tariffs should be retained for products including certain ceramics, fertiliser and fuels.
  • Tariffs on sets of goods including bananas, raw cane sugar, and certain kinds of fish. These are designed to ensure preferential access to the UK market for developing countries.

It’s important to note that these temporary import tariffs will not apply to goods crossing from Ireland into Northern Ireland.

The Worst-Case Scenario

Shipping suppliers must prepare for the best and worse-case scenarios and there are several implications to consider:

  • The department of transport has already warned those shipping to the continent and other freight haulers that they may now need EMCT permits post-Brexit.
  • 80% of haulers have stated that Brexit has had a negative impact on their plans for future investment. This likely means they are bracing for added costs rather than putting money into infrastructure.
  • Port delays are a major worry as there is not a sufficient infrastructure to deal with more tariffs and the cost of importing to rise. This may be offset for many items in the twelve months post-Brexit as outlined above.
  • Most companies will no doubt be well into their contingency plans by now as this has been a concern for the past few years. Many are stockpiling non-perishables in order to avoid an added tax bill, but it does still leave the logistics industry in a world of doubt.

The Uncertainty of Continental Shipping

Currently, the EU has its own laws and regulations regarding the transport and distribution of goods. Once we leave the EU, Britain will be able to regulate its domestic shipping but there are many questions left about the future of continental shipping.

If our new transportation regulations are laxer than those established on the continent, it is going to become increasingly time consuming at borders ensuring regulations are met, meaning a likely increase in cost.

This is perhaps the crux of the issue – currently couriers can travel into the EU unhindered and deliver their consignments quickly and safely while keeping cost to a minimum. What’s more, parts can enter the UK from the continent quickly to keep the whole industry running smoothly and, more importantly, cost effectively. This might be a way of the past once the Brexit negotiations are finalised.

Contingency Planning

But it’s not all doom and gloom. As noted, many courier companies have been preparing themselves for any eventuality and should already have contingencies in place to counter the uncertainty surrounding Brexit.

Many companies are investing in their fleet and increasing specialised transports to ensure delays will not hinder fresh or perishable goods.

It will be a learning curve as rules and regulations change but with the logistics industry being an integral part of the UK’s economy, solutions will always be found.

Brexit has been on the horizon for several years now and as it grows closer, logistics providers have been doing their research and know that the guesswork thus far will be somewhat close to the mark. As a result, the ethos of many courier companies will not need to change, and they will find effective solutions to overcome the challenges post-Brexit.

Consult with Your Courier Partners

If you’re concerned about the effects of Brexit on your own logistics, now is the time to discuss it with your courier partners. Your courier partner will be able to answer your questions to the best of their current knowledge and do their best to find solutions to your problems. Creating logistical contingency plans is the best way to prepare your business for the uncertainty ahead.

Moving Forward

Whatever happens, the logistics industry should be positioned to deal with the long and short-term effects. If you are looking for a courier service post-Brexit, look for one that is not willing to compromise on standard and service in the face of change.

This is the basis upon which our services are built and there is no need to compromise this ethos despite the uncertainty of the near future.

If you have any thoughts or concerns about the future of logistics post-Brexit, please do get in touch. Tel: 0800 999 1010. Same Day Dispatch Services would love to hear your views and give our expert advice if we can.

Tags: , ,